Shareholders May Be Wary Of Increasing Kangda International Environmental Company Limited's (HKG:6136) CEO Compensation Package

Key Insights

• Kangda International Environmental will host its Annual General Meeting on 6th of June
• Total pay for CEO Jerry Duan includes CN¥1.34m salary
• Total compensation is 132% above industry average
• Kangda International Environmental's EPS declined by 26% over the past three years while total shareholder loss over the past three years was 51%

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Kangda International Environmental Company Limited (HKG:6136) has not performed well recently and CEO Jerry Duan will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 6th of June. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Kangda International Environmental

Comparing Kangda International Environmental Company Limited's CEO Compensation With The Industry

According to our data, Kangda International Environmental Company Limited has a market capitalization of HK$738m, and paid its CEO total annual compensation worth CN¥1.9m over the year to December 2024. Notably, that's an increase of 24% over the year before. In particular, the salary of CN¥1.34m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Hong Kong Water Utilities industry with market capitalizations below HK$1.6b, we found that the median total CEO compensation was CN¥839k. Hence, we can conclude that Jerry Duan is remunerated higher than the industry median. What's more, Jerry Duan holds HK$3.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 93% of total compensation represents salary and 7% is other remuneration. It's interesting to note that Kangda International Environmental allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Kangda International Environmental Company Limited's Growth Numbers

Kangda International Environmental Company Limited has reduced its earnings per share by 26% a year over the last three years. Its revenue is up 2.0% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kangda International Environmental Company Limited Been A Good Investment?

With a total shareholder return of -51% over three years, Kangda International Environmental Company Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are concerning) in Kangda International Environmental we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.